The speech of Chairman Douglas Tong Hsu:
Good morning, ladies & gentlemen. Before we start today’s briefing with you, particularly the new shareholders, we’d like update you with the total OUCC shareholders as of today 71,816, which is a considerable number indeed.
Last year, following the global economic downturn starting 4Q/2008, chemical industry, like most businesses, had no exception experienced a huge tumble, which lasted till 2Q/2009. Thanks to the global rebound at the 2nd half of 2009, if I may say this, OUCC not only survived the tough circumstances, with all the efforts from its management team & all, OUCC has benefited with net earnings before taxes 1.7 billions, which is 39% increase, though total sales revenue lessens, compared to the previous year. And, we may, with shareholders approval, distribute 1.7 NTD cash dividend per share. This is definitely no easy piece of work. We shall brief you with more details later of how our management team achieved it. Now, shall we give them applause. (Clapping)
It’ll be easy to put it in one statement if business operation, sales & earnings in 2009 had all been below average that ‘year 2009 is bad due to the fall of ethylene prices, and so on.’ However, it’s the same hardship and continuous search that distinguish OUCC as of a road model. As you know OUCC, originally established for mainly EG business and now been extended to assorted specialty chemicals stemming from EA/EC/EOD, has remained constant growth and been capable to find our own way no mater what circumstance we are in. Later, we shall provide you with more details in this regard, along with how we’ve decided to stretch our business tentacle across the strait, to be freed from lack of upstream raw material from CPC, in which move it shows also how we cope with a changing world by simply going with its changing flow and stay profitable. How is 2010 as you may ask? I can only say so far the 1st half looks good, please see for yourselves our 1Q/2010 performance in the coming presentation. As to the 2nd half, it’s too early to say. Let’s have a look at the crude oil. The crude oil price starts climbing after its last drop to USD 68 from USD 84. Then, what will the world look at BP’s US Gulf accident? Will oil well drilling be too dangerous to continue? If drilling has to be exhibited, which will certainly have impact on the global supply & demand, as we all know the remaining oil mines or natural gas exist mainly at coastal areas, what shall the world react then or the petrochemical industry survive? There lies a very interesting question. Running a petrochemical company requires not only the management of product line, but the whole unit as all. Like the concept of environmental friendly we’ve been taking into account to align with government’s movement of CO2 Remission. OUCC has been rewarded with Excellence in Secure Companion of National Industrial Park in 2009 by CLA of Administrative Yuan and awarded the 3rd place in Green Environment. This should show you, especially to the new shareholders, our efforts in achieving sustainable development and our bright future ahead. Thank you all for coming today. We shall start our presentation in a second, during which Vice Chairman shall share with you his perspective over the future tendency and President shall brief you OUCC’s business operation, as openly as we always do with corporate info disclosure. Thank you. (Clapping)

The speech of Vice Chairman Johnny Shih:
Thank you, Chairman. Good morning shareholders. The slides you’ve just viewed obviously gave OUCC certain credit. Let me share some viewpoints I have on market analysis. As OUCC is in petrochemical business, which relies totally on crude oil. If you could remember, crude oil prices have fluctuated in between USD 147, prior to the global economic downturn, when our MEG was priced at around USD 1500/MT, and USD 35-40 at 1Q/2009 when MEG was at USD 500/MT (1/3 of the former), and back to around USD 74 as of yesterday when MEG at USD 1000/MT by year end 2009. See what impact the crude oil has on our MEG, which contributes 50% of the sales revenue. From the viewpoint of average unit price, 2009 MEG unit price dropped 38% compared to 2008, the major reason 2009 sales revenue suffered a 28% loss. However, as Chairman has just delivered, our 2009 net profit 1.8 NTD per share has increased 28% in growth than 2008, which proves itself a never easy task. Now, we have a look at polyester, the major customer of MEG. PET’s average growth rate for the past decade remained approx. 6%. 2009 showed a booming growth rate of 3.7% from its record low 0% at 2008. The forecast for 2010-2011, according to the analysts worldwide, growth rate shall reach 6%-7%. 2010 alone, PET production capacity in China totals 27 million tons, which holds 54% of its global volume 49 million tons. China’s growth rate for 2010-2011 is projected at 10%, as global is projected at 6%-7%, in another term, average growth rate besides China will be proportioned at 3%-4%. In this regard, we see the importance of ECFA to petrochemical industry. Take MEG for example, we expected the advantage of signing ECFA this year, as 70% of China’s production capacity of 2011 will still depend on importation. If ECFA can’t be signed this year, as it seems to be, it will be signed next year I believe. Therefore, I would say, MEG can’t be as bad as predicted on the newspaper due to the launch of new production capacity into the market. The increased 4000KT this year, in comparison with previous year, sums up only 20% of global capacity 18000KT. My personal view upon MEG for 2009-2011 hence stays positive.
From the other side, as it was just mentioned, unit price of SC of last year plunged due to the fact of raw material driven. As of this year, our price is much increased than last year and remains stable. Our performance of this year should be predicted good according to the report of 1Q/2010 just shown and with the 1st half outgrown same time last year. From where we stand, we should see OUCC with pretty good chance and growth ahead, as the 2-billion invested EA & EOD plants in Yangzhou and 1-billion invested EOD plant in Linyuan scheduled to launch production respectively at year end 2010 and 2012. All these, as I just said, have pointed out OUCC’s bright future. Thank you. (Clapping)

The speech of President Alex Kuo:
Good morning fellow shareholders. Delighted to have this chance representing the management team to remark on some key points regarding OUCC’s future development, strategy and heading direction. All these years, OUCC has been focused on its operational transformation, as Chairman & Vice Chairman just reported to you. OUCC has been transforming from a solely 100% EG business to nowadays 50% and keeps transforming. Due to the volatility of EG price, which could easily drop from 1000 to 500 within a few months, OUCC has been reinforcing our profits, stability and searching for high value-added products as of our continuous transforming to versatile SC for the past 7-8 years. By end of this year, our SC may occupy 40%-45% of sales revenue. By end of next year, upon the completion of our Linyuan EOD plant and the launch of 5 new products, our SC will then occupy 55%-60%, end of OUCC’s 1st step transformation to SC in Taiwan. This is my first point to share with you.
Secondly, I’d like to remark on our position in China. There have been quite some issues across straits lately, for instance the signing of ECFA and how petrochemical get across to China. One of the most important key points is the raw material, which we’ve been working very hard to procure from the upstream suppliers CPC & Sinopec in years, and it’s from the latter that we’re ensured of the sufficient supply of EO to get constructed our Yangzhou plants, our first SC plant in east China. It’s a great result to see and to foresee our constant efforts in expanding our capacity in China. Then comes the market, the east China, where Yangzhou locates, is where the most prosperous market is. Upon the completion of a EA this year and a EOD next year, OUCC will have by then 100KT SC in east China, from where we shall further stretch out along the Yangtze River to reach mid China, which is currently under the development scheme of China government. We wish to build the 2nd and 3rd SC plants by procuring raw materials in Wuhan and Chengdu to gradually accomplish our positioning in China. Finally, there lies the specialty in our positioning in China, which is based on SC, as none governments across straits allow private construction of ethylene cracker with procured ethylene at the stage. We target at 100% producing & selling to the locals as our current positioning in China, with which we’re full of hopes and ideas.
Lastly, I’d like to talk about is energy conservation & CO2 remission, the green chemical. As you clearly saw in our presentation, it’s a global trend. Green chemical is a goal that can’t be achieved right way because it needs to have a biomass raw material to replace a petrochemical raw material, for example, it’ll be beyond imagination, if the consuming energy of global 100 million tons/year of petrochemical or natural gas for producing ethylene be fully replaced by biomass. At present, the total ethanol for export in Brazil is no more than 400 million metric liters per year. We estimate it a long way to take to get ethanol turned into green ethylene prior to the production of green MEG. As we know green chemical is a global trend. We, OUCC, shall do our best to take good use of the chance to further develop bio ethanol and to speed up our evaluation of ETE(ethanol-to-ethylene) technology. I do wish to update you with more details in this regard in our next shareholder meeting. OUCC will never disregard such trend, either from the view of the downstream demand or the development of mankind. Above is my report to you. Thank you all.(Clapping)

Contents of presentation:
(1) Company Introduction (2) Operation Performance (3) Market Analysis (4) Business Strategy
Shareholders Meeting Procedure:
The important resolutions of OUCC’s Shareholders Meeting of 2009:
(1) Items to be reported:
A. 2009 Business Report
B. 2009 Financial Report
C. Supervisors’ Report
(2) Matters to be approved:
A. To accept the 2009 Business Report & Financial Report
Resolution: Approved by all shareholders present with unanimous consent.
B. To approve the appropriation of 2009 earnings
Resolution: Approved by all shareholders present with unanimous consent.